Take Control of Your Mortgage: Tips for Dealing with Mortgage Servicers
July 18, 2023Consumer Protection
Owning a home is a dream come true for many of us. However, it also comes with its own set of challenges, and dealing with mortgage servicers is one of them. A mortgage servicer is simply the company that you pay your mortgage payments to. While they generally keep decent records, they can still make mistakes like sending a statement with the wrong amount owed, unexplained charges, and failing to credit a payment.
If you've ever noticed an issue with your mortgage statement, it probably caused you some alarm. Maybe your mortgage servicer misapplied your payment. Or, you were charged fees for an alleged late payment.
If this happens, don't panic. There are clear steps you can take to right the wrong. And it starts with sending a letter to your mortgage servicer. Federal mortgage servicing rules require servicers to correct errors related to mortgage loans.
Use this sample letter to contact your mortgage servicer to fix an error. Your mortgage servicer is the company to which you make your house payments. Use the steps below to help your inquiry into the issue be successful and create a record of contact in case you need to hire an attorney later on.
Here's What to Keep In Mind
Make 100% sure that you send the letter to the right address!
Your servicer may have a special address for error correction requests. Find it on your monthly statement or coupon book, or contact your servicer to ask (or look online). Note that the error correction address may be (and probably is) different from the address to which you send monthly payments. Letters sent to the wrong address “don’t count” and won’t require the mortgage servicer to respond.
Keep a copy of the letter and make sure that you note the date you send it.
This is important because the mortgage servicer has to respond to you within a certain number of days (and failure to do so violates federal law, as long as you’ve sent the letter to the right address).
Things you should include in your letter
Include your name, address, and mortgage account number.
Use the name on the mortgage, and include your spouse or co-borrower if they are also on it.
Identify the mistake.
Describe the error accurately. Here are some examples:
- Provide details: “I made my January payment on time. I paid $1,500 on January 1 but was still charged a late fee.”
- Be specific. Instead of writing, “You did not apply my payment correctly,” explain how the payment was applied incorrectly.
Do not use a payment coupon or other payment form from your servicer to write the letter.
What to expect
If you follow these instructions, your servicer must acknowledge receipt of your request and either:
- Correct the error and confirm the correction, or
- Investigate and report that no error occurred, with an explanation.
Generally, servicers cannot charge a fee for responding to error requests. Your servicer may ask you for more information about the error, but they cannot refuse to investigate or report no error just because you didn't provide information.
Your servicer doesn't have to investigate your error request if:
- Your request is too broad
- You send the same request multiple times
- You're requesting help with a loan transferred to another servicer or paid off more than a year ago.
The Timeline
The servicer must acknowledge receiving your letter within five business days of receiving it.
You will likely get a brief letter from the servicer within that time (legally required, but the mortgage servicers do not always comply with this rule!)
The servicer has a limited amount of time to investigate or correct your error and send you a letter describing the actions it has or will take.
If you are writing to say your servicer started or scheduled a foreclosure improperly:
- The servicer must respond to your letter before the foreclosure sale or within 30 business days if they received your letter more than seven days before the sale.
- The servicer should make a good-faith effort to respond to your letter if they receive it seven days or less before the sale.
- If you are writing to say the servicer gave you an inaccurate payoff balance, the servicer must respond within seven business days of receiving your letter.
- For all other errors, the servicer must respond within 30 business days.
Note that In some cases the servicer may ask for more information or an additional 15 business days to investigate and respond. This is allowed.
